Special Report

Best and Worst Run States in America: A Survey of All 50

Samuel Stebbins

Source: SeanPavonePhoto / Getty Images

36. Pennsylvania
> 2017 unemployment: 4.9% (11th highest)
> Pension funded ratio: 52.6% (7th lowest)
> 1 yr. GDP growth: +2.2% (15th highest)
> Poverty rate: 12.5% (22nd lowest)
> Moody’s credit rating and outlook: Aa3/Stable

After Rhode Island and neighboring New Jersey, Pennsylvania ranks as the worst run state in the Northeast. Pennsylvania has enough money set aside to meet only about half its total pension obligations, a far smaller share than most states. While Gov. Wolf recently announced the state would allocate roughly $22 million to its rainy day fund, Pennsylvania is also one of just a handful of states with no money currently set aside to fund government operations in the event of an emergency. Pennsylvania’s job market is also relatively weak. In 2017, 4.9% of workers in the state were unemployed, well above the comparable 4.4% national unemployment rate.

Economic growth in Pennsylvania is on pace with that of the nation. The GDP of the United States and Pennsylvania grew by 2.2% in 2017.

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37. New Jersey
> 2017 unemployment: 4.6% (20th highest)
> Pension funded ratio: 30.9% (the lowest)
> 1 yr. GDP growth: +1.6% (25th highest)
> Poverty rate: 10% (7th lowest)
> Moody’s credit rating and outlook: A3/Stable

New Jersey lags behind the nation as a whole in a number of key economic measures. For one, the state is facing the worst pension crisis in the country, with funding for just 30.9% of its total pension obligations. As more Garden State residents reach retirement, the state’s shrinking workforce is not likely to help with the pension crisis. The number of workers in the state has fallen by 0.7% over the last five years. The state is also hampered by slow economic growth and high unemployment in comparison with nationwide averages.

Earlier this year, Republican Chris Christie left the New Jersey governor’s office with the lowest approval rating in state history. The sitting governor, Democrat Phil Murphy, won the office after running a campaign that centered largely on fixing the economy and getting the state on track to a fully funded pension system.

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38. Arkansas
> 2017 unemployment: 3.7% (16th lowest)
> Pension funded ratio: 76.9% (15th highest)
> 1 yr. GDP growth: +0.3% (12th lowest)
> Poverty rate: 16.4% (7th highest)
> Moody’s credit rating and outlook: Aa1/Stable

Economic growth is far slower in Arkansas than in most other states. Arkansas’s GDP growth was just 0.3% in 2017, even as the U.S. economy grew by 2.2%. The state also has very little in the way of emergency funding with the equivalent of just 2.3% of its annual expenditures saved in a rainy day fund. Among state residents, economic hardship is relatively common. Some 16.4% live below the poverty line, one of the highest poverty rates of any state.

Improved educational outcomes among Arkansas residents would likely help improve economic conditions. Currently, just 86.7% of adults in the state have a high school diploma, among the 10 lowest high school education attainment rates of any state.

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39. Alabama
> 2017 unemployment: 4.4% (22nd highest)
> Pension funded ratio: 67.2% (24th lowest)
> 1 yr. GDP growth: +1.6% (25th highest)
> Poverty rate: 16.9% (6th highest)
> Moody’s credit rating and outlook: Aa1/Stable

Overall quality of life in Alabama is weighed down by poverty and crime. The state’s 16.9% poverty rate is well above the 13.4% national poverty rate, and its violent crime rate of 524 crimes per 100,000 people is significantly higher than the nationwide rate of 383 per 100,000. While Alabama’s 4.4% unemployment rate is in line with the national rate, its 1.6% 2017 GDP growth was sluggish relative the 2.2% national economic growth.

Greater educational attainment would likely result in improved economic and social conditions in Alabama. Just 86.5% of adults in the state have a high school diploma and 25.5% have a bachelor’s degree, the seventh and eighth lowest shares, respectively, of all states.

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40. Rhode Island
> 2017 unemployment: 4.5% (21st highest)
> Pension funded ratio: 53.7% (9th lowest)
> 1 yr. GDP growth: +0.7% (15th lowest)
> Poverty rate: 11.6% (20th lowest)
> Moody’s credit rating and outlook: Aa2/Stable

Rhode Island ranks as the worst-run state in New England and the broader Northeast. Rhode Island has accumulated some of the most debt of any state, and is one of just four states in which total outstanding debt is greater than annual revenue. Partially as a result, Rhode Island allocated 6.1% of its general expenditure to interest payments alone, the largest share of any state.

Rhode Island is partially economically hamstrung by relatively high unemployment, a shrinking labor force, and sluggish growth. Last year, 4.5% of workers in the state were unemployed, slightly more than the 4.4% national unemployment rate. Over the last four years, the number of people working or looking for work in the state fell by 0.4%, even as the U.S. labor force grew 3.4%. Rhode Island’s 0.7% GDP growth in 2017 was less than one third of the 2.2% national growth.